Author: Daniel Lerch

After climbing more than $20 a barrel from $52 in late December to nearly $75 on April 23rd, prices have fallen back so that Brent closed at $70.85 on Friday. Despite threats to the oil supply from the geopolitical situations in Iran, Libya, Venezuela, and Nigeria, prices have been falling for the last two weeks. Last week prices fell to recent lows after the US stocks’ reports showed unexpected crude oil builds for two weeks in a row and EIA said that US oil production was growing again after holding steady for two weeks. It takes about 60 days to compile accurate US production data. EIA estimates and forecasts of US production have been a bit shaky of late so we will not know if the prediction that US shale oil output grew by 84,000 b/d to a record of 8.4 million in March is correct until the end of this month.

Last week began with oil prices continuing to climb on concerns that tightening sanctions on Iran would cut oil supplies. Brent crude touched $75 for a short time after Moscow announced that it was halting some crude shipments to Europe due to contaminated pipelines. Thursday afternoon market sentiment reversed, and prices plunged circa $3 a barrel to close at $62.86 in New York and $71.61 in London on Friday. The price drop was helped by a presidential tweet that said “Spoke to Saudi Arabia and others about increasing oil flow. All are in agreement.”

Oil prices continued to climb slowly last week with Brent closing just below $72 a barrel, a new high for the year, and New York futures closed $8 a barrel lower at $64. Prices are still about $13 a barrel below the 2018 high of $85 set last October. The news last week was generally bullish with the Saudis reporting an official 277,000 b/d drop in February, Iran having trouble selling its oil, Venezuela’s production continuing to fall, and the prospect that the civil war in Libya seems likely to reduce its exports. China reported that its massive dose of pump priming appears to have stabilized its economic slowdown for now and Washington keeps talking about an end to the China-US trade dispute.

Oil prices continued to creep up last week closing out at $71.55 in London and $63.89 in New York, making the sixth consecutive week of gains. If you have been watching your gas pumps lately, you have noted that regular is up 30 cents a gallon in the last month to average $2.83 in the US. In California, however, regular is just about $4 a gallon and is going for $4.62 in one county.